Fixed Deposit (FD) Calculator
Interest is reinvested and compounds — paid as one lump sum at maturity.
Deposit & tenure
Advanced options
Enter your deposit details
Add a deposit amount and tenure to see the maturity value, interest and payout schedule.
Know what this estimate is based on
- Jurisdiction
- Interest arithmetic, which no statute governs; the deposit-insurance limits and the national rate context around it are federal and U.S.-only
- Rules and time period
- APYs and balances are the ones you enter, not live offers. FDIC and NCUA coverage limits and the FDIC national rate caps change independently of this page.
- Scope and limitations
- Projection only. Actual APY, posting dates, compounding method, minimum balances, withdrawal rules, penalties, fees and tax on the interest depend on the institution and your account agreement.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter your deposit — the single lump sum (principal) you want to lock in.
- 02
Set the annual interest rate your bank quotes for that term.
- 03
Set the tenure — how long the deposit stays locked, in years or months.
- 04
Choose the payout option (cumulative, reinvested to maturity, or regular payout) and pick the frequency: monthly, quarterly, half-yearly or yearly.
- 05
Open advanced options to add the tax on the interest, an early-withdrawal penalty, or an inflation rate for the after-tax, broken-early, or real figures.
- 06
Read the maturity value, the cumulative-versus-payout comparison, and the period-by-period schedule.
Formula
Cumulative option (interest is reinvested and compounds) — maturity value: A = P × (1 + r/n)^(n × t) Interest earned = A − P Payout option (non-cumulative, interest is paid out and NOT reinvested): Interest paid each period = P × r / f Total interest over the term = P × r × t (flat, so it does not depend on how often you take the payout) Total value = P + (P × r × t), with the principal P returned to you at maturity Where: P = the principal — the single lump sum you lock in (there are no top-ups) r = the annual interest rate written as a decimal (6.5% = 0.065) n = compounds per year in cumulative mode (yearly 1, half-yearly 2, quarterly 4, monthly 12) t = the tenure in years — how long the deposit stays locked f = payouts per year in payout mode (yearly 1, half-yearly 2, quarterly 4, monthly 12) A = the maturity value returned in cumulative mode Effective annual yield: cumulative = (1 + r/n)^n − 1 payout = r (payouts are taken as cash rather than reinvested, so the yield equals the quoted nominal rate)
Example
Lock $25,000 for five years at 4.00% — about what a competitive five-year CD paid in 2026. Choose cumulative with quarterly compounding and the interest is reinvested every quarter, so the deposit grows to $25,000 × (1.01)^20 = $30,504.75 at maturity, $5,504.75 of it interest, an effective annual yield of 4.06%. Switch to the monthly payout option and nothing compounds: you receive $25,000 × 0.04 ÷ 12 = $83.33 a month, $5,000 of flat interest across the term, and your $25,000 back at the end — $30,000 in all. Reinvesting therefore leaves you $504.75 ahead of taking the monthly check. Add your tax rate — 24%, say — and $1,295.66 of the interest goes to the IRS, leaving $4,102.91 and a $29,102.91 total.
Definitions
- Principal
- The single lump sum you commit at the outset and lock in for the full term. Unlike a savings account, you make no further deposits; this fixed amount is what earns interest.
- Tenure
- The agreed period your deposit stays locked with the bank, running from the opening date to maturity. You set it upfront — commonly a few months to several years — and cannot easily change it.
- Maturity value
- Everything payable to you when the tenure ends. In a cumulative deposit that is principal plus all reinvested interest; in payout mode it is simply the principal handed back.
- Cumulative FD
- A fixed deposit where interest is added back and itself earns interest at each compounding date, then paid as one lump sum at maturity. Maturity value equals P·(1 + r/n)^(n·t).
- Non-cumulative (payout) FD
- Interest here is paid out each period instead of being reinvested. Total interest works out to P·r·t regardless of how often you draw it, and your principal is returned intact at maturity.
- Compounding frequency
- How often, in cumulative mode, earned interest is credited to the running balance so it too begins to earn — monthly, quarterly, half-yearly or yearly. More frequent compounding lifts the maturity value.
- Effective annual yield
- Your true yearly return once compounding is counted in. For a cumulative deposit it is (1 + r/n)^n − 1, sitting above the quoted rate; in payout mode it equals the nominal rate.
- Nominal rate
- The headline annual rate the bank contracts to pay, before compounding is factored in. Multiply it by the principal and years for total flat interest; compounding then raises the effective return above it.
- Tax on the interest
- Interest is ordinary income in the year the bank credits it. A US bank does not withhold it: it reports interest of $10 or more on Form 1099-INT and you settle it at your marginal rate when you file. Withholding happens only as backup withholding, at 24%, if you never gave the bank a taxpayer ID.
- Interest you expect to go untaxed
- Leave this at $0 for an ordinary US bank CD — there is no annual allowance for bank interest. It is here for the cases where the interest genuinely escapes federal tax, such as a CD held inside an IRA.
- Early-withdrawal penalty
- Break the term and you forfeit part of the interest. US banks quote this as months of interest — commonly 3 months on a one-year CD and 6 on a five-year one — while this tool models it as a cut to the rate you actually earned. The two line up: on a five-year CD broken at two years, a 1-point cut costs the same as six months of interest.
- Real (inflation-adjusted) value
- What your maturity sum is worth in today's money once rising prices are stripped out. Deflating by the inflation rate shows the genuine purchasing power your deposit will command at maturity.
Good to know
How a fixed deposit works
A fixed deposit is a single sum of money you place with a bank and agree to leave untouched for a set period. You choose the amount, called the principal, and a tenure, anything from a few weeks to several years, and in return the bank fixes an interest rate for the whole term. That rate does not move with the market once the deposit is opened, so you know from day one exactly what the arrangement will pay. Because the product is built around one lump sum, there is nothing to top up along the way; you commit the money once and let the clock run to maturity, the date the term ends. The trade-off for that certainty is lock-in. Unlike a flexible savings account, where you can pay in and draw out whenever it suits you, a fixed deposit expects the principal to stay in place until the agreed date. You can usually break it early, but doing so is treated as an exception and carries a cost that a later section covers. In everyday terms, you are lending the bank a defined amount for a defined time, and the fixed rate is the price it pays for that commitment. At maturity the bank returns your principal together with the interest the deposit has earned. What happens to the interest in the meantime is the deposit's defining choice: you can let it build inside the deposit, or have it paid out to you at regular intervals. Those two routes lead to different end figures, which the following sections work through. For now the essentials stay simple, one amount, one rate, one fixed term, and a known maturity date that tells you when your money comes back.
The fixed deposit maturity formula
When interest is allowed to build inside a fixed deposit, its maturity value follows one compact expression: P times (1 + r/n) raised to the power (n times t). Each symbol stands for something you set when you open the deposit. P is the principal, the lump sum you place. The letter r is the annual interest rate written as a decimal, so a quoted 6.5% enters the formula as 0.065. Then n is the number of times a year interest is added to the balance, the compounding frequency, which might be once, twice, four times, or more. Finally t is the tenure in years. Read the formula in plain steps. Dividing r by n gives the fraction of the annual rate the bank credits at each compounding date. Adding 1 turns that fraction into a per-period growth factor. The exponent n times t counts every compounding date between opening and maturity, so raising the factor to that power ages the locked sum across the entire tenure. Multiplying by P scales it to the amount you actually committed. Subtract that original principal from the maturity value and what is left is the interest the locked deposit produced. Take a worked example. You place $100,000 at 6.5% a year, compounded quarterly, for five years. Quarterly compounding means n is 4, so each quarter the deposit grows by 0.065 divided by 4, which is 0.01625. Over five years there are 4 times 5, or 20, such quarters, giving 1.01625 raised to the power 20. That factor works out to about 1.38042, so the maturity value is $100,000 times 1.38042, which is $138,042. Of that final sum, $38,042 is interest and the original $100,000 is your returned principal. The same formula handles any combination of amount, rate, frequency, and term.
Cumulative versus payout: reinvest or take the income
Every fixed deposit forces one decision: should the interest stay in the deposit or come out to you as it is earned? The two answers are the cumulative and payout options, and they behave very differently. Under the cumulative option the interest is credited to the deposit and then earns interest itself. Nothing is withdrawn until the end, so each compounding period works on a slightly larger balance than the one before. The whole lot, principal plus accumulated interest, arrives as a single sum on the maturity date. This is the mode the maturity formula in the previous section describes. Choose payout, sometimes called non-cumulative, and the interest is handed to you at regular intervals and never rejoins the balance. Because it is removed, it cannot go on to earn further interest. The principal sits unchanged for the whole term and is returned to you at maturity, while the interest has already been paid across the intervening periods. The gap between the two shows up clearly in that example. Left to compound quarterly, $100,000 at 6.5% over five years matures at $138,042. Taken as income instead, the same deposit pays out interest that totals $100,000 times 0.065 times 5, or $32,500, so you walk away with $132,500: your $100,000 principal plus the $32,500 received along the way. Reinvesting therefore leaves you $138,042 minus $132,500, which is $5,542, better off over the five years, purely because the interest in cumulative mode was allowed to earn on itself. Higher does not automatically mean better for you, though. The payout option suits anyone who needs a steady stream of income from their savings, a retiree topping up a pension, say, and is willing to trade the compounding uplift for cash in hand each period.
Compounding frequency and effective annual yield
Two fixed deposits can advertise the same annual rate and still not pay the same amount at maturity. What separates them is how often the bank adds interest to a cumulative balance, the compounding frequency, n in the maturity formula. The more frequently interest is credited, the sooner each credit joins the locked balance and begins earning in its own right, and the more the deposit returns across the tenure. To compare deposits on equal footing, translate the quoted, or nominal, rate into an effective annual yield: the single figure that captures what a full year of compounding actually delivers. The conversion takes (1 + r/n), raises that factor to the power n, and then subtracts 1. You split the annual rate into n equal slices, let each slice compound across the year, then strip out the original 1 to leave the true annual growth. Work it through on that 6.5% rate. At 6.5% compounded quarterly, r is 0.065 and n is 4, so each quarter adds 0.065 divided by 4, which is 0.01625. Compounding that across four quarters gives 1.01625 to the power 4, roughly 1.0666, and subtracting 1 leaves 0.0666, an effective annual yield of about 6.66%. The headline rate said 6.5%, yet a year of quarterly compounding is really worth 6.66% to you, the extra 0.16 of a percentage point being the compounding effect made visible. Push n higher and the yield edges up further. Half-yearly sits below quarterly, monthly above it, and daily higher still, though the gains shrink as the frequency climbs and each step adds less than the last. Effective yield is the fair basis for comparing two cumulative deposits whose nominal rates and compounding intervals differ. It matters only when interest is left to compound; take the interest as income and it never reinvests, so there the yield you receive is simply the nominal rate.
Interest payout options and the payout schedule
When you choose the payout option, the next question is how often you want the interest to arrive. Banks typically offer monthly, quarterly, half-yearly, or yearly payouts, and the choice shapes the rhythm of the income rather than its total. Each payment equals the principal times the annual rate, then split across the number of payouts a year: P times r divided by f, where f is that frequency. On a $100,000 deposit paid monthly, f is 12, so each payment is $100,000 times 0.065 divided by 12, which is $541.67, arriving twelve times a year for five years. Switch to quarterly and f becomes 4, lifting each payment to $1,625, but there are only four of them a year. Half-yearly pays $3,250 twice a year; yearly pays $6,500 once. Notice what stays constant. Across the whole term the interest adds up to P times r times t regardless of how you slice it. In that example it is $100,000 times 0.065 times 5, or $32,500, in every case. Frequency changes the size and timing of the payments, not the sum of them, because in payout mode nothing is ever reinvested; each payment leaves the deposit and the principal alone continues to earn. That is why the calculator can lay out a schedule of dated payments for you. Starting from the deposit date, it marks each payout point across the tenure and shows the fixed interest amount due at each; your principal is untouched throughout and comes back as a separate lump sum at maturity. The schedule makes the income stream concrete, so you can see exactly when money lands and plan around it. If you would rather the interest built up instead, the cumulative option covered earlier keeps every payment inside the deposit to compound.
Tax on CD interest, and the year it lands
Interest from a fixed deposit — a certificate of deposit, in US terms — is ordinary income, taxed at your marginal rate rather than at the lower rates that apply to long-term capital gains or qualified dividends. Your bank reports it on Form 1099-INT once it reaches $10 in a year, sends a copy to the IRS, and takes nothing out: unlike a paycheck, a CD carries no withholding. The one exception is backup withholding at 24%, which applies only when you have not given the bank a taxpayer identification number. The calculator applies the rate you enter once per year to that year’s interest, which is how the bill actually falls due. The detail that matters for a fixed deposit is what withholding does in cumulative mode. Because your interest there is meant to stay in the deposit and compound, paying the tax out of the deposit mid-term leaves the balance and stops compounding for the rest of the term. The net maturity value therefore ends up below the untaxed figure by more than the raw tax taken, since you also forfeit the growth that money would have produced. In payout mode the interest was already leaving each period, so the tax simply trims each payment. The timing is the trap worth knowing. On a multi-year cumulative CD the interest is taxable in the year the bank credits it, not the year you finally collect the money, so the tax can fall due on income you cannot yet spend. Two ways around it: hold the CD inside an IRA, where the interest is not taxed as it accrues, or choose a term short enough that the maturity and the tax bill land together. Enter your own marginal rate — the federal bracket plus your state rate, if your state taxes interest — to see a realistic net return rather than a headline gross one.
Breaking a fixed deposit early
The whole point of a fixed deposit is the lock-in: you agree to leave the principal untouched for the tenure, and in return the bank quotes you a fixed rate. If you need the money before maturity, most banks let you break the deposit, but they rarely honor the original rate. Instead they recalculate your interest at a reduced rate for the period you actually held the deposit, typically the contracted rate minus a penalty expressed in percentage points. Suppose you locked in at 6.5% with a one-point penalty and withdrew partway through. The bank would then credit interest as though you had earned 5.5% over the months held, not 6.5%. The calculator isolates what that costs you. It works out the value your deposit would have reached at the held period on the full contracted rate, then the value at the reduced rate, and reports the gap between them as the penalty cost. That single figure tells you what walking away early actually surrenders, separate from the interest you did keep. One simplification is worth flagging. This tool models the penalty purely as a rate reduction. In practice many banks go a step further: they re-price your broken deposit at the card rate for whatever shorter tenure you ended up holding, which can be lower again than your contracted rate minus the penalty. Some also levy a flat administrative charge. The genuine cost of breaking early can therefore run larger than the clean number shown here. Before you commit funds you might need at short notice, check your bank's specific premature-withdrawal terms, and weigh whether a shorter tenure, or splitting the sum across several deposits, would spare you the penalty altogether.
Inflation and what your maturity is really worth
A maturity value is a number in future money, and future money buys less than the same amount does today. If prices are rising while your deposit is locked away, the sum you collect at the end will not stretch as far as it seems to on paper. To judge whether your deposit genuinely grew your purchasing power, you have to deflate that nominal maturity back into today's money. The calculator does this using the inflation rate you supply. It discounts the maturity or total value across the tenure at that rate, giving a real, present-day figure alongside the headline one. On that $100,000 deposit, the cumulative option matures at $138,042 in nominal terms; if inflation ran at, say, several percent a year over those five years, the real value you could actually spend would be visibly lower, even though the balance on your statement is unchanged. This is where a healthy-looking yield can mislead. An effective annual yield of 6.66% feels comfortably positive, but if the cost of living is climbing faster than that, your deposit is losing ground in real terms: you end the tenure with more dollars yet less buying power than you started with. The nominal return is only ever half the story, and the gap between it and inflation is the part that decides the outcome. Reading both figures together changes how you weigh a fixed deposit before you lock in. A contracted rate that clears expected inflation with room to spare is doing real work; one that merely matches it preserves value without building it; one that trails it quietly erodes what the maturity sum will buy, however healthy the balance looks. Because the rate is held for the whole tenure, you cannot react midway if inflation accelerates, so treat the figure you enter as an estimate of an unknowable future and revisit the decision before committing, not after.
Common fixed-deposit mistakes
A surprising number of fixed-deposit decisions leak returns for avoidable reasons. The most common is choosing the payout option when you do not actually need the income. If regular interest payments simply land in a checking account and sit there, you have given up compounding for nothing; the cumulative option would have put that same interest back to work. On that $100,000 deposit, that choice is worth $5,542 over five years, the difference between the $138,042 cumulative maturity and the $132,500 you collect taking monthly payouts. Ignoring tax is another. People compare gross rates, forget that the interest is taxable in the year the bank credits it, and are then surprised the net maturity falls short, an effect that bites hardest in cumulative mode, where withheld tax also stops compounding. Chasing a headline rate without checking the compounding frequency is related. A deposit advertised at a slightly higher nominal rate but compounded annually can deliver less than a marginally lower rate compounded quarterly, because it is the effective yield that determines what you keep. Locking everything into one long deposit is a subtler trap. It maximizes the quoted rate but leaves you fully exposed if you need cash early, forcing exactly the premature withdrawal whose penalty you wanted to avoid, and it bets your whole sum on today's rates. Splitting the money across staggered maturities, a ladder, keeps part of it reachable and lets you re-deposit at prevailing rates as each rung comes due. Finally, breaking a deposit early for a short-term want you could have planned around converts a fixed, known return into a penalized one. Each of these is easy to sidestep once you have seen the numbers: match the payout mode to your need, read the net figure, and lock only what you can genuinely leave alone.
Tips to maximize fixed-deposit returns
If you do not need the interest to live on, choose the cumulative option. Letting the interest stay in the deposit and compound is the single largest lever you control, and it costs you nothing but patience. Within cumulative, prefer more frequent compounding where the bank offers it; quarterly beats annual on the same nominal rate, because each earlier crediting gives the next period a slightly larger base to grow from. Compare deposits on effective annual yield, not the nominal rate on the poster. Two deposits quoting the same headline number can pay differently once compounding frequency is accounted for, and the effective yield is the figure that reflects what actually lands in your account. Align the tenure with the date you expect to need the money, so you are neither tempted nor forced into an early break; a deposit you can hold to maturity delivers its full contracted return, while one you rupture delivers a penalized one. Consider laddering rather than committing everything to a single long lock. Splitting your sum across staggered maturities keeps part of it within reach, smooths your exposure to rate changes, and lets you roll each maturing rung into a fresh deposit at whatever rate prevails. Where the money can sit inside an IRA, holding the CD there keeps the interest out of your return as it accrues; in cumulative mode that also protects the compounding that a yearly tax bill would otherwise interrupt. And keep an eye on inflation, since a return that clears the cost of living is the one that builds real wealth. Every figure this calculator produces is an estimate built on the rates and assumptions you enter, meant to help you compare options rather than to serve as financial advice; confirm the specifics with your bank before you commit.
Frequently asked questions
What is a fixed deposit (term deposit)?
A fixed deposit is what most of the world calls the product a US bank sells as a certificate of deposit, or CD: it locks a single lump sum with your bank for an agreed term at a rate set on the day you open it. You commit the whole amount upfront — there are no top-ups during the term — and in return the rate is held steady until the maturity date. When the term ends the bank returns your principal plus the interest it has accrued, and up to $250,000 per depositor is insured by the FDIC (or the NCUA at a credit union).
What is the difference between a cumulative and a non-cumulative FD?
The split turns on what happens to each interest credit. In a cumulative FD each interest credit is retained in the deposit and earns further interest, then the whole sum is paid once at maturity. In a non-cumulative (payout) FD the interest is handed to you every month, quarter, half-year or year and never rejoins the balance; only your original principal is returned at the end. Choose cumulative to grow the deposit, payout for regular income.
How is the maturity value calculated?
For a cumulative deposit the tool applies compound growth: maturity = P × (1 + r/n) raised to the power n×t, where P is your principal, r the annual rate, n the number of times interest compounds each year and t the tenure in years. On $25,000 at 4.00% compounded quarterly for five years that is $25,000 × 1.01^20 = $30,504.75, so the interest earned is $5,504.75. A payout FD instead returns P plus the interest already paid out.
What does the effective annual yield mean?
The effective annual yield restates your rate as the single figure you actually earn over a year once compounding is counted. For the cumulative deposit above it is (1 + r/n)^n − 1 = 1.01^4 − 1 = 4.06%, a touch above the 4.00% headline rate because interest earns interest within the year. That figure is what a US bank advertises as the APY. On a payout CD nothing is reinvested, so the effective yield stays equal to the nominal 4.00%.
Does the compounding frequency change what I earn?
Yes, on a cumulative deposit. The more often the bank credits interest to the running balance — monthly rather than yearly, say — the sooner it starts earning on itself, so the maturity value edges up even though the headline rate is unchanged. The effect is real but modest at ordinary rates. On a payout FD frequency makes no difference to the total, because interest is withdrawn each period and never gets the chance to compound.
How is my monthly or quarterly payout worked out?
On a non-cumulative FD each installment is simply the principal times the annual rate divided by the number of payouts a year: P × r ÷ f. With $25,000 at 4.00% paid monthly, f is 12, so you receive $25,000 × 0.04 ÷ 12 = $83.33 each month. Paid quarterly, you would divide by four and receive a larger sum four times a year instead. Your principal is untouched and comes back at maturity.